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This is a joint post with Sarah Rose.

It's not your father's USAID. That's the big message in USAID's first progress report on how the agency, under Administrator Rajiv Shah's leadership, is trying to be smarter about where and how it delivers aid around the world. There's a lot to like in the report: better evaluation, more developing-country partners, mobile technology and an end to some programs. This is all good news for revamping USAID, but our enthusiasm is tempered by the constraints USAID can’t fix alone.

USAID counselor Dave Eckerson gives a good background on the birth of USAID Forward reforms at a USAID mission directors' conference in 2009 before Shah had been officially confirmed as USAID's administrator. USAID Forward has since become the agency's plan for fulfilling its part of the Presidential Policy Directive on Global Development and the Quadrennial Diplomacy and Development Review. And it’s a helpful tool for communicating the agency's priorities.

Here are a couple of things we liked in the progress report: 

  • Balance. USAID shares achievements and success stories but is also frank about the challenges and where more work is needed including improving evaluation quality and measuring things like “capacity development.”
     
  • Signs of selectivity. USAID reports a 22 percent reduction in country-program areas since 2010 based on new country development cooperation strategies. Strategy development in big bureaucracies is often just repackaging, so it's good to see that USAID missions are using the process to move away from some programs that either no longer needed USAID to continue or were too small to have an impact (and we’re eager to find out which programs fall into this category).
     
  • Better evaluation policy in practice. Since 2011, 186 “high quality” independent evaluations have been submitted to USAID and are contributing to the public stock of evidence about what works in development. Better still, USAID missions are reportedly using the evaluation results to inform program and budget decisions. To its credit, USAID admits the evaluations span a range in quality and needs to keep pushing for full compliance with its evaluation policy.
     
  • Slow and steady progress towards local partnerships. USAID promised to invest more resources through partners in developing countries. The idea is that more direct spending will, in the right scenarios, yield more lasting development results and save money, too. US development contractors and some NGOs oppose the shift of resources away from their own organizations (signs of the development-industrial complex). The frustrating thing about the debate has been the lack of data on how USAID currently invests and how it measures results. The progress report is a first (but we hope not the last) step to provide some of this detail. It also gives more information on the multiple risk assessments USAID uses in the process.
     
  • Cool new stuff: DCA and mobile tech.  USAID's Development Credit Authority (DCA) provides loan guarantees to unlock other sources of capital. We've applauded it before for using crowdsourcing to map DCA’s loan guarantee data.  According to the progress report, DCA mobilized $700 million in commercial capital last year ($500 million more than in 2011). And USAID got an award this year for its work to expand mobile services for women in developing countries.

But we have a few suggestions where USAID could make the progress report stronger:

  • More data for the data nerds. USAID Forward aims to measure progress which is great, but the summary data in the report makes us thirsty for the underlying data—including baseline data—to do our own analysis.  Public datasets allow others to verify the information reported and answer questions the progress report might not already be addressing.
     
  • Go beyond output indicators. Wherever possible, USAID should move beyond output indicators to measure outcomes and impact.  For instance, it's useful to know the percent of mission funds implemented through local systems, but it will take more than this indicator to determine whether the program helped strengthen local capacity, country ownership, and sustainability. Output and process indicators are appropriate for a mid-term progress report, but less useful for measuring whether USAID achieved its goals.

The USAID Forward reforms—and the effort to measure and communicate progress—should be commended. They are changing USAID in important ways. But the never-ending budget morass that is supposed to be about saving money could end up undermining USAID Forward’s good efforts to do just that. And there are issues beyond USAID’s own control (i.e. multiple US agencies operating under outdated foreign assistance legislation and budget processes) that still constrain USAID and the rest of US foreign aid even if those issues are considered political non-starters today. It may not be your father’s USAID anymore, but it’s still living under its grandparents’ roof.